May God Help Us | Translation

May God Help Us | Translation


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Translated by MC Editorial

[Daniel Alarcón]: This is Radio Ambulante, from NPR. I’m Daniel Alarcón. 

Let’s go to Lima, Peru. It’s the night of August 8, 1990, and Juan Carlos Hurtado Miller is at the studios of Channel 5, also known as Panamericana Televisión. He has a double role in the Peruvian government: He is President of the Council of Ministers and also Minister of the Economy and Finance. The TV channel is in a building near the National Stadium, on a block known as Television Corner. At the time, it is the most important and influential TV channel in Peru. Hurtado Miller has come to broadcast a message to the nation.

[Juan Carlos Hurtado Miller]: I was very nervous—very, very nervous, not only because of the harshness of the message, but also for the possibility that we might have made mistakes in its conception or that we might fail in the following days.

[Daniel]: He had arrived with his brief speech written on a piece of paper, but before going on the air, he had to send it to the teleprompter, that machine that allows you to read a text while looking directly at the camera.

[Hurtado Miller]: And they put it in front of me and taught me how to use it, right? It took me half an hour to type the teleprompter.

[Daniel]: Perhaps because of the stress. You see, the message he was going to give was unprecedented in Peruvian history. With a few minutes to go before 9 p.m., Hurtado Miller sat in front of the camera. There was a Peruvian flag to his left, and he had a glass of water on the table. But he wasn’t alone. The cabinet ministers of then-President Alberto Fujimori were also there. All but three, who had refused to participate. 

At nine o’clock, the broadcast began.

Hurtado Miller announced that the government would take a number of measures to confront the serious economic crisis the country was going through. And here is some context: Peru was experiencing hyperinflation that would exceed 7,000 percent that year. That is, prices multiplied more than 70 times. Such monstrous hyperinflation was unprecedented except in Bolivia . . . and in Germany, Russia, Poland and Hungary after the First World War. Or, to give a more recent example, in today’s Venezuela.

As a policy to cushion the blow of hyperinflation, the government had been controlling how much things cost for several years.

In a way, the speech was very theoretical, not so easy to understand for most Peruvians. But in one moment, the abstract issue became something very real, the thing that many would truly remember from that night.


[Hurtado Miller]: So a can of evaporated milk that cost 120 thousand intis on the street today will cost 330 thousand intis as of tomorrow. A kilo of white sugar that was available for 150 thousand intis will cost 300 thousand intis starting tomorrow. The baguette that cost 9 thousand intis this afternoon will cost 25 thousand intis starting tomorrow. 

[Daniel]: And these figures mentioned by Hurtado Miller could rise even higher. Everything would be uncertain. 

In Zárate, a middle-class neighborhood located about 10 kilometers from Channel 5, where the minister was transmitting this news, Carlos Meléndez was present. He was 13 years old at the time, and he watched the speech on television with his parents and his two younger brothers. He remembers his mother’s face: she was stunned. Still; silent. 

[Carlos Mélendez]: My father said, “Calm down, they know what they’re doing, they are economists.” And meanwhile, the Finance Minister finishes stating the prices and says . . . 

[Hurtado Miller]: May God help us. 

[Carlos]: God help us. That overruled any calm my father wanted to instill that night. And when the announcement ends, my mother, with red eyes, about to cry, says to my father, “What are we going to do?”

[Daniel]: Thousands of Peruvians were wondering the same thing at that precise moment. What became known as the “Fujishock” had just begun . . . The government eliminated subsidies for the basic food basket and increased prices to reduce demand and inflation.

To some, the Fujishock was the only way to save Peru. To others, it was a mistake that would throw millions of Peruvians into extreme poverty. But there is one thing that everyone agrees on: This package of economic measures changed the country’s history, and its repercussions are still being felt, three decades later. 

We’ll be back after a break.

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[Daniel]: We’re back with Radio Ambulante. In today’s episode, we’re going to tell the story of how the Fujishock came to be. And how it affected the Peruvian middle class. It will be a story with numbers and economic concepts, but we’ll be careful not to confuse you. 

 Political scientist Carlos Meléndez tells us the story. 

This is Carlos.

[Carlos]: The night of the announcement, my whole family went to bed worried, uncertain of what would happen the following day.

Our house was a special one in the Zárate neighborhood. It was one of the few that had a telephone with a commercial license, so it could be leased to make calls. The neighbors would come and pay a few intis to use it. I remember the morning after the shock, my dad got up early, went to the front door and stood in front of the sign that announced the phone rate. He stared at it for a long time, trying to figure out what to do. I also have the image of him looking at the price list in the newspaper and trying to understand how to adjust to the increase, calculating how much he should charge for a three-minute call.

Outside the neighborhood, it looked like a religious holiday. There was nobody on the streets. You could feel the panic of the people who didn’t want to go out for fear of finding out how much things cost now. They all feared the same thing: that they would not have enough to cover their basic necessities. 

My mother had a stand in the marketplace near the house, where she sold bazaar products and toys. That day, the business remained closed, like so many others. 

There was also fear of the Shining Path, the terrorist group that had been causing death and destruction since 1980. By then, violence was at its peak. Bombings occurred on a daily basis, but, of course, we never got used to it. There was talk of a potential big, armed strike or a terrorist intervention as a reaction to the shock. 

I want to contextualize the Peruvian situation a bit. This is former President Alan García in a speech he gave at the United Nations in 1985, announcing that the country would pay only a minimum part of the debt it owed. 


[Alan García]: We have made a decision that we will uphold. Peru will assign only one out of every 10 dollars to the debt. One tenth of what it is paid for its labor or its exports. 

[Carlos]: The country, as we’ve already said, was going through a huge political and social crisis. The climate catastrophe of the El Niño phenomenon in 1982-1983, and the terrorism of the Shining Path and the Túpac Amaru Revolutionary Movement left thousands of dead and material damages in the millions. 


[Alan García]: This is a responsible and revolutionary decision. Because it is the decision of a poor country, an importer of food and industrial supplies, whose debt is to Western banks, a country that has suffered and continues to suffer under the pressure of the Monetary Fund. 

[Carlos]: But there were repercussions. The International Monetary Fund declared Peru to be “ineligible” for loans from large entities, such as the Inter-American Development Bank and the World Bank. 

But García had a plan to live without international credit. The first things he did was boost private sector demand and spending, cut taxes, and lower interest rates to revive the economy. These measures worked for two years… in a way. The economy grew almost 10 percent a year, which is amazing for any country. 

He went on to create public-sector jobs by expanding the state bureaucracy, but inflation began to rise. In an attempt to contain prices, he granted subsidies to companies and workers, froze savings in foreign currency, and controlled the prices of the basic food basket. That is, it was the government that decided how much things were worth, not the producers or the market. 

But, of course, subsidies, salaries, public investment . . . were all expenses. Peru needed money. So instead of resorting to loans, the government itself printed bills, even though it had no foreign currency reserves to back them up. That is, they were printing money they didn’t have. 

Over time, millions of intis came to be usable for buying very little. Commodity prices rose day by day, or even in a matter of hours. Merchants sometimes hid products rather than sell them, because they would be worth more three days later. 

By 1987, Peru had almost no international reserves to show foreign countries that it could pay and that its money was worth something. At that time, inflation was at 85.5 percent, that is, prices almost doubled in one year. García’s popularity was falling rapidly, and to try to recover, he proposed that the banks become state-owned. He did not manage to pass this reform, and the high levels of popularity he had enjoyed at the beginning of his government fell to the ground. 

The scarcity of those years transformed our lives. In my neighborhood, with my friends and family, a large part of our day was spent queuing up with buckets in parks or municipal reservoirs to bring water home, since it was common for the service to be suspended, as also occurred with electricity; or at the bakeries, where you had to get up at five in the morning to get a few loaves of bread two or three hours later; and it was very difficult to find rice or sugar in the shops.

By 1989, a year before holding general elections, Peru had hit rock bottom. With hyperinflation of almost 3,400 percent, the campaign themes were two: terrorism and the economic crisis. The leading candidate was the famous writer Mario Vargas Llosa, from the Democratic Front or FREDEMO, a coalition with a neoliberal ideology. Supported by the establishment and by businesses, his campaign was huge, intense, and very media-oriented.


[Singers]: Let’s go, Peru, let’s go with Mario. Let’s work with him. 

[Carlos]: Vargas Llosa proposed undoing everything that Alan García had implemented during his government. To stop hyperinflation, he proposed an economic shock. 


[Vargas Llosa]: We have to reform this State. And above all, we have to turn it into an efficient State, into a State that truly serves Peruvians and not, as is often the case now, one that uses them to favor a few minority groups in the country. 

[Carlos]: The shock proposed by Vargas Llosa would cause the demand for products to decrease because prices would skyrocket. Then they would quickly begin to go down and stabilize. 

That, at least, was the theory. But there would be a high cost: millions of Peruvians would be unable to buy basic necessities, such as food. Let’s remember that about half of all Peruvians lived in poverty. The measure was not popular, not at all. People were scared.

Among the marginal candidates was an agricultural engineer and mathematician unknown to the majority: Alberto Fujimori, who ran with the Cambio 90 party. His main strength lay in a simple slogan: Honesty, technology, and work.

No one had a clear idea of Fujimori’s ideology, or what his specific proposal was to address Peru’s problems, but the fact is that his low profile began to resonate among the people. 


[Singer]: … from an old-time dawn, Fujimori must be President… 

[Carlos]: A month before the elections, polls showed Fujimori with less than 2% of vote intention. In one of the latest polls, published by the newspaper El Comercio on March 24, Fujimori did not reach even 5%. 

It was in those days that economist Santiago Roca entered the picture. He is now 71 years old. 

[Santiago Roca]: I teach and research at the University

[Carlos]: At the Centrum PUCP, the business school of the Catholic University of Peru. 

At the time of the 1990 elections, Roca was 39 years old. A friend of his, also an economist, called Jorge Chávez, kept a close eye on the election, especially the surprise that Fujimori meant. 

[Santiago Roca]: So, he would always come looking for me and say, “Hey, there is a candidate who is rising in the polls” (laughs). I said, “I don’t believe you.” “Yes, there is,” and that’s good . . . 

[Carlos]: Jorge Chávez knew that Fujimori did not have an economics team —that’s how marginal and amateurish he was—and he saw an opportunity. Although he was not close to Fujimori, he began to put together a proposal to present to the candidate. Even though they didn’t even know each other

[Santiago Roca]: He comes to me, shows me what he has written. I review it. I critique it. We changed some things, I changed some things, and obviously I laughed . . . I laughed. “So what are you going to do?” I say. “Jorge, look, if you don’t know Fujimori, what are you thinking?” (laughs).

[Carlos]: Jorge took the document to Fujimori’s campaign headquarters a few days before the first round of elections, handed it over, and didn’t hear back. No calls, no thanks, no rejections. Nothing. But shortly afterwards, still before election day, Santiago saw Fujimori on television. The candidate was just beginning to attract the attention of the media, presenting his government proposals. 

[Santiago Roca]: And when I listened to Fujimori, he embraced practically the entire speech that Jorge—Jorge Chávez—had given him.

[Carlos]: Santiago couldn’t believe it. As soon as the program ended, he called Jorge to comment on what he had just seen. 

[Santiago Roca]: And Jorge said to me, desperately, “Well, damn, how incredible, how incredible! How incredible!” Well, “he should call me any moment now.”

[Carlos]: But Fujimori did not call him—not that day nor the following day, nor the day after that. 

[Santiago Roca]: In despair, Jorge Chávez said, “How is it possible that he doesn’t even call to thank me?” “I can’t take it anymore.” He says, “Come with me. I’m going to look for him at his house.”

[Carlos]: Santiago said he was sorry but he couldn’t go.

[Santiago Roca]: That was about six o’clock in the evening. At about eight o’clock at that night, someone rang my doorbell saying he had to take me urgently because candidate Fujimori wanted to see me.

[Carlos]: Santiago had things to do, but the person insisted. He wouldn’t leave without him. Resigned, he went to Fujimori’s house. He entered his office, and there also was Jorge Chávez. 

[Santiago Roca]: Fujimori was sitting at his desk. He sees me and says . . . he greets me. “Mr. Roca,” he says, “I know a lot about you.” He stops. He turns to his bookshelf, his desk, and says, “I have your writings here.”

[Carlos]: And here we must explain that Santiago was an economist and expert in development issues. In the 1980s he had written several articles and books on macroeconomics, creating models of what could happen in the Peruvian economy in different contexts. 

In 1989, he published an article asking the government to take immediate action in view of the crisis. He called for a consensus between parties, so that whoever was elected would implement a program that Santiago called a “hinge.” Put very simply, this program was more moderate than the shock proposed by Vargas Llosa. Not all commodity prices would go up right away; they would increase little by little. 

The shock to citizens would be hard, but not THAT hard. 

And that night in Fujimori’s office, the candidate seemed to know everything that Santiago had proposed. 

[Santiago Roca]: Then he says, “Thank you for coming.” He looks at Jorge Chávez and me, and he tells us, “You guys are a godsend” (laughs).

[Carlos]: Then Fujimori told Santiago: 

[Santiago Roca]: “I want to invite you, Mr. Roca, to be the head of the government plan so that you can put together a stabilization and growth plan for Peru.”

[Carlos]: Jorge Chávez would help Santiago, but from a distance, since he had to return to England to finish his doctorate. Santiago replied that he had to think about it, that it was an enormous responsibility. He spent a few days analyzing the issue, but decided that it was, indeed, a good opportunity. And he told Fujimori that he would work with him. Thus, with Fujimori already qualified for the second round against Vargas Llosa, they began to form the economic team and draw up the rescue plan for Peru. 

[Santiago Roca]: He trusted me fully, he allowed me to organize the government plan, he gave me total freedom to form the teams. 

[Carlos]: Santiago called people who agreed with an economic proposal plan that he says had been published in the Central Reserve Bank’s magazine Moneda. The far left and the neoliberal right were ruled out as part of his team. 

[Santiago Roca]: I was looking for people who were not from the extremes. More focused and more sensible, let’s say.

[Carlos]: His goal was to deal with hyperinflation and the fiscal deficit while affecting citizens as little as possible. 

[Santiago Roca]: In economics, it is all about doing things at the lowest possible cost. It’s very easy to kill inflation crudely. If you take away people’s incomes, they will have no way to buy, and if they have no way to buy, prices will fall. 

[Carlos]: So Santiago proposed that the country produce more things, in order to increase supply and create jobs so that people would have purchasing power. According to him, the problems would not be resolved in one or even two years, but the social cost to the citizens would be less. 

There was a second central point in his economic plan: the creation of a new currency. This proposal was designed by economists from the Catholic University. It would be called Amaru. The new currency was proposed with the aim of killing inflationary expectations, that is, stem the idea that prices were going to continue rising indefinitely. The goal was to build trust and credibility—a psychological effect that he believed was important for people.

And the third point: 

[Santiago Roca]: It was the national control of public policies. What does national control mean? Prioritizing national interests over foreign interests.

[Carlos]: Santiago’s proposal was to prevent the interests of other countries or international financial institutions from being above the needs of the people. Making policies for the people, in a way. 

Now, here we must clarify something. What Santiago had was a proposal, a theory—just that. In practice, there is no certainty that what he proposed would have worked. 

[Santiago Roca]: The government plan was practically drawn up at my house. Fujimori came every day; he remained with the team and with me until three in the morning.

[Carlos]: Santiago remembers Fujimori as a calculating character. 

[Santiago Roca]: But very austere as a person. Very simple. And always obsessed with effectiveness and results. He always wanted to see results.

[Carlos]: They became very close. 

[Santiago Roca]: From time to time, he took me on rides . . . on a truck, going to see the young populations where I could get a view of reality. We went to inhospitable places, or places with a tremendous level of poverty.

[Carlos]: It was shocking for him because, of course, he was an academic engaged in macroeconomic theory, oblivious to the day-to-day life of most Peruvians. The experience confirmed what he thought: that a large part of the country could not tolerate an economic shock like the one that was proposed. 

The second round of elections was held on Sunday, June 10, 1990.


[Journalist]: Alberto Fujimori rose to power yesterday with strong support from the Peruvian poor. 

[Carlos]: Fujimori defeated Vargas Llosa with 62 percent of the votes, and with the support of the ruling party and the left. The people, full of fear, chose an unknown candidate with few proposals to solve the country’s problems, but one who promised he would not do anything drastic to the economy. 

But all this was to change. And everyone, including Santiago, would be taken by surprise.

[Santiago Roca]: Once he won the second round, they sold him the idea that it is important to solve the international issues.

[Carlos]: Who gives him that idea?

[Santiago Roca]: Hernando de Soto tells him, “It is important for you to resolve the international problem.”

[Carlos]: Hernando de Soto was a liberal economist who had published The Other Path, the canonical textbook of the Peruvian right. He was very influential nationally and internationally. When Fujimori became President, he saw a great opportunity to promote his proposals. So he requested an appointment with him and offered him all his contacts. 

And there is something important to understand here. Fujimori, who was a nikkei, that is, a direct descendant of Japanese parents, wanted the support of his parents’ country. 

[Ricardo Lago Gallego]: Fujimori had the idea that, because he was the son of Japanese parents, Japan would take his presidency of Peru as a matter of international honor and Japanese prestige, and that it would come with a checkbook and solve all the problems facing Peru.

[Carlos]: This is Ricardo Lago Gallego. When Fujimori was elected, he was working at the World Bank in Washington, D.C. Although the organization had already closed its office in Lima, they wanted to maintain contact with the government of Alan García, and he was chosen. Convinced that an economic shock was the only way to pull Peru out of its crisis, he was always on the lookout for an opportunity to promote it. The change of presidency was a key moment. 

Meanwhile, Fujimori, hoping to find support in Japan, organized his first international trip as president-elect to the country of his ancestors. Hernando De Soto told him to go. But he also told him to visit the United States, where he would organize a lunch with the Secretary General of the United Nations, Peruvian Javier Pérez de Cuéllar, and the presidents of the International Monetary Fund, the World Bank, and the Inter-American Development Bank. Fujimori was excited. And of course, he accepted.

On June 28, 1990, Fujimori traveled to New York to meet with representatives of the major international financial organizations. Santiago Roca did not go with him because he was busy fine-tuning the economic plan. There were only a few days left before Fujimori assumed power. For his part, Ricardo Lago, although he was not at that lunch, wrote the speech for the president of the World Bank, and he is well aware of what happened. 

[Lago Gallego]: The message was, “Look, you have a lot of ideas about what to do in Peru and a lot of enthusiasm and stuff. But there are a number of problems here that you need to solve.”

[Carlos]: Hyperinflation, debts owed to the international finance system, the weakness of a mismanaged economy, terrorist violence, etc. 

[Lago Gallego]: If you don’t fix that, you will never be able to get out of the hole.

[Carlos]: And they say they will help him, on one condition: Apply an economic shock. In other words, something not very different from what the rival candidate, Mario Vargas Llosa, had proposed. And they also tell him: 

[Lago Gallego]: We need a trial period during which we’ll see if you are complying. They said that as the lunch was ending, and Fujimori replied—and these are the exact words—, “I thank you for telling me this at the end of our lunch, because if you had told me at the beginning, I would not have eaten.”

[Carlos]: They had put Fujimori against the wall. 

[Daniel]: We’ll be back after a break.

[Lupa App Mid-Roll]

[Daniel]: We’re back with Radio Ambulante. I’m Daniel Alarcón. Before the break, we heard how Alberto Fujimori planned his first trip as Peruvian president-elect in 1990, in the middle of the most serious economic crisis the country has ever faced. The final destination of the trip would be Japan, the land of his parents, where Fujimori would ask for help to save Peru from the economic abyss. But first, there would be a lunch in the United States, specifically in New York, with very important people in the area of international finances. 

During that lunch, they presented him with a proposal: That he apply an economic shock, and release prices in one fell swoop, and let the market regulate them . . . If he did as they asked, they would give him the financial aid he desperately needed. 

Carlos Meléndez continues the story. 

[Carlos]: Fujimori arrived in Tokyo on July 1, 1990. There, he requested support from the Japanese government so that the Peruvian economy could once again enter the international financial system. In addition, he took the opportunity to visit Kumamoto, hometown of his parents, and held diplomatic meetings that ended in promises of aid. He returned to Peru a few days later. 

[Lago Gallego]: He comes back with his hands and feet tied—you have to do it, you simple have to. It was not an intellectual or analytical conviction; there was no choice but to do it.

 [Carlos]: On his return to Lima, Vladimiro Montesinos, who by then was one of Fujimori’s top advisers, convinced him to isolate himself in the Círculo Militar, one of the headquarters of the Peruvian armed forces. 

Montesinos was a former member of the Army, and he authorized all entries and exits from the facility—according to him, for security reasons. No one could contact Fujimori, not even his future finance minister, Santiago Roca. 

But within a few days, Fujimori finally got in touch with Santiago. 

[Santiago Roca]: And in that meeting, he asked me to implement, as Finance Minister, the plan of the International Monetary Fund.

[Carlos]: Santiago asked for explanations. Why change the plan? And more importantly, why take on the opponents’ plan?

[Santiago Roca]: And he answers me very pragmatically. “Look, Santiago,” he says, “we have good ideas. What the people from the International Monetary Fund have presented also seem like good ideas. You know I’m not an economist. I’m an engineer. So I see good ideas also. But the difference is that the Monetary Fund and the World Bank have money. And we don’t have money. We only have ideas. Our program is gradual. What if it doesn’t work? If after a year or two, inflation is still 300 percent, people are going to turn against us. Politically, it is better to start an administration hitting hard. Hitting as hard as you can, because the one who pays the cost of the shock is the previous government.”

[Carlos]: Santiago told him that he did not agree with the plan of the International Monetary Fund and that it seemed unethical to him to change the government plan when the people had already voted. He decided that he could not take the post of Minister of the Economy and Finance. Almost all the members of the economic team backed him up in his decision to withdraw.

[Santiago Roca]: He was sort of frozen, shall we say. We went out and wrote a letter of resignation that same night. We submitted the resignation and we sent it to all the newspapers that same night.

[Carlos]: This is how Juan Carlos Hurtado Miller, President of the Council of Ministers and Minister of the Economy and Finance, whom we heard at the beginning of this episode, enters the story. 

When Fujimori was elected, Hurtado Miller lived in Argentina. He had his own business and was somewhat distanced from politics. He knew Fujimori, but not very well. They went to the same school, although they were never friends, and later, when Hurtado Miller was Minister of Agriculture, he had called him to be part of an advisory committee, since Fujimori was rector of the National Agrarian University of La Molina. 

After Santiago Roca submitted his resignation, Fujimori sent for Hurtado Miller, who thought he would be offered a repeat of his assignment as head of the agriculture sector. But as they sat down to talk, he realized that the president-elect had a different plan for him. He asked him to be not only Minister of the Economy and Finance, but also President of the Council of Ministers. 

[Hurtado Miller]: He said, “Because the measures that you are going to have to take require full authority and you need more authority than just Minister of Finance. As the senior member of the Council of Ministers, you will be able to do the things that I know you are going to do, the things that are necessary. Unless you’re afraid,” he says. “No,” I told him, “I’m not afraid —I’m panicked. But let me tell you, Alberto, having courage doesn’t mean not being afraid; it means being afraid but knowing how to overcome it. And that’s what I hope to do, if I take on the job.

[Carlos]: Hurtado Miller accepted both jobs. 

Fujimori assumed power on July 28, 1990. 


[Alberto Fujimori]: We have to face the deepest crisis that the country has experienced in its entire history as a republic. A society divided by violence, corruption, terrorism, and drug trafficking. In a word, almost a wartime economy

[Carlos]: For the economic team, the most urgent thing was to create a social emergency program. The effects of the shock would hit the most vulnerable sectors of Peruvian society, and it was necessary to try to protect them as much as possible.

[Hurtado Miller]: We have to provide food assistance to the people, because the shock is very strong, as well as the price increases. A monstrous thing; for people with low incomes, it was a terrible thing.

[Carlos]: The program created local committees to offer food aid and temporary, low-skilled jobs in community kitchens or public cleaning brigades, for example.

Another measure to contain the shock to the citizens would be to give monetary bonuses and increase the minimum wage. 

But the shock involved more than just price increases. Easy-to-collect taxes would also be imposed, tax exemptions would be eliminated, and there would be an adjustment in the exchange rate with the dollar.

Hurtado Miller met with Fujimori’s economic team every day to draw up the plan for the shock. The presentation would be broadcast over national television. 

[Hurtado Miller]: What we said was, there may be a tremendous reaction, because inflation and prices are, ah, huge.

[Carlos]: So, together with Fujimori, they established the possibility of decreeing a state of emergency, a state in which constitutional guarantees are suspended, in case the citizens decided to protest. 

Furthermore, Hurtado Miller informed Fujimori that he would give a message of hope to the Peruvian people, who are devout Catholics. That’s what we heard at the beginning, ending with the phrase “May God help us,” devised by Felipe Ortiz de Zevallos, a friend and adviser to Hurtado Miller.

At this point, we need to understand the relevance of Channel 5, where Hurtado Miller would make the announcement about the economic shock. 

[Mónica Delta]: Channel 5 set the political and social agenda in Peru for a long time. Channel 5 was the place where all changes happened, not only social and economic, but everything that generated an impact on people.

[Carlos]: That is Mónica Delta, a well-known Peruvian journalist. In 1990, she was working at Channel 5 as a presenter and reporter covering the Presidential Palace. 

[Mónica]: Everything that happened in Peru, good or bad, went through the Television Corner. 

[Carlos]: The channel belonged to the Delgado Parker family, and two brothers made most of the decisions: Genaro and Héctor. That electoral campaign had divided the brothers, as it had the rest of Peru.

[Mónica]: I witnessed a fistfight between the two brothers, because Genaro bet 1000 percent on Mario Vargas Llosa.

[Carlos]: And Héctor, who was a friend of former President Alan García, had a discreet sympathy for Fujimori. He was also concerned that the channel should not appear to openly support Vargas Llosa, and this did not honor the impartiality of the press. 

But of course, nobody there expected Fujimori to win. Ever. 

[Mónica]: It was shocking to see faces in general, you know? And politicians began coming in to be interviewed, and it was a whirlwind.

[Carlos]: The Peruvian people were tired of the same old thing and decided to bet on an unknown.

[Mónica]: It was a bucket of cold water for many people. Deep down, it seemed to me, personally, that the country had spoken. Of course, it had spoken differently, and we weren’t acknowledging it in Peru, and we didn’t have the full measure of what was happening in Peru.

[Carlos]: Although what Mónica says is true—that the people had spoken—it is also true that, by voting for Fujimori, they voted for a candidate who had proposed something other than shock. However, on August 8, 1990, only ten days after assuming power, the President of the Council of Ministers, Hurtado Miller, made the announcement that no one expected. Mónica was at the National Congress, getting ready to head for the TV station. 

Genaro and Héctor, the owners of the channel, were friends of Hurtado Miller. Mónica believes that, in addition to the influence of that television station at the national level, the closeness of the three was what ended up deciding why Channel 5 was chosen for the announcement. 

Mónica watched the speech there, along with other colleagues. And, like the rest of the Peruvians, she heard . . . 

[Hurtado Miller]: May God help us.

[Carlos]: Mónica Delta remembers that the following day, the mood in Lima was dark.

[Mónica]: We are sort of used to seeing anxious faces in Lima, right? In other words, the crisis had generated a lot of anxious faces, as had the fear of terrorism, right? But imagine. The night before, gasoline cost, I think, 21,000 per gallon and the next day 600,000. That’s 30 times more, right?

[Carlos]: Sadness, pain, anxiety. That’s what Mónica saw.

The day after the announcement, four deaths were reported in the country, due to looting attempts and demonstrations. 


[Carlos]: That’s a water cannon shooting at protesters.


[Host]: Since last August 8, when the Fujimori government launched its austerity plan, shortages and social unrest in the country have increased. 

[Carlos]: But one thing is certain: Peru did not rise up against Fujimori on that occasion. They accepted their fate.

There are some facts that are not in dispute. After the shock, which was terrible, an image that my generation has etched in its memory . . . hyperinflation came down . . . Five years later, it was 10%, something unthinkable during the initial days of the shock. And Peru’s economy continued to grow, for decades. It came to a stop only with the Covid-19 pandemic. 

But it is also true that in the short term, things were very painful. Poverty increased horrendously. It went from 38 percent in 1985 to 57 percent in 1991, as a result of the measures taken. This means there were about 12 million poor people in Peru at the beginning of the 1990s, and the percentage remained high throughout that decade.

Poverty fell in the 2000s, to 22 percent, before the pandemic caused it to rise again, but the cost of achieving this was enormous. 

From 1990 to 1996, almost 300 thousand Peruvians left the country, many because of the economic situation. And those who stayed . . . ?

[Santiago Roca]: What did teachers do? They drove taxis. What did the police do? They had to have two, three jobs.

[Carlos]: In Zárate, my neighborhood, things were not very different. Mrs. Lucha, who had a garage in her house, turned it into a hair salon. Don Epifanio, who had a small garden, converted it into a kiosk to sell juice. Nino turned his living room into a restaurant. And they weren’t the only ones. 

The day they put traffic lights on my block, I realized that we had changed, like a sizable part of Lima and the country. We were no longer a neighborhood where we played in the streets. Now there was traffic. Activity. And this neighborhood, which was a neighborhood of employees and full-time workers with pay slips at the end of the month, became a commercial place. Gran Chimú Avenue was packed with shops, galleries, and even street vendors. 

At my house, the call service I told you about at the beginning was expanding. First, we bought a photocopier. Then a computer and printer to provide services of document transcription and printing. All this came at a cost: my family had to sell my mom’s stand where she sold clothing. It was a matter of survival. We read the market, so to speak. We analyzed where the economy and daily life was going, and we adapted. Years later, we even switched course again, to become a warehouse.

It was difficult at the beginning, of course, but for us, things actually went well. We made it. My brothers and I went to school, we finished school and went to the university to pursue careers that we liked. I emigrated to get a postgraduate degree. Things that can be considered privileges, but we got them by working hard, as employees of the small family business after school hours.

My story is not the story of most Peruvians. Many people my age left the country, others decided to start a business, and many others had to work informally, with no job guarantees. All the people who were fired from public-sector companies that were privatized during the shock also had to find their way.

This was the birth of our popular capitalism, which is so highly praised by the defenders of the model. This is also how our quality of life became more precarious, as its detractors criticize.

During the past decade, informal work has remained at close to 75 percent. Right now there are over 11 million people in this situation. It is a brisk economy, but without social security or protected retirement.

Finally, the key to the success of the neoliberal model that was imposed through the economic shock was not the technocrats—those with the power to design the country’s macro economy—but the informal workers, those millions of people who lost many of their social rights as a result of the decisions made by a few. Those people who had no choice but to survive were the true authors of the “Peruvian miracle.”

But today, that market model is more questioned than ever. A rural school teacher, Pedro Castillo, was elected president a few months ago on the promise of transforming the Peruvian economy, this time to a more equitable model.

As in 1990, we Peruvians voted for a stranger without a very clear plan for the country. For this reason, many still prefer to defend the current economic model, with all its merits and errors. The future is uncertain. Thirty-one years later, we Peruvians continue to pray . . . May God help us.

[Daniel]: Juan Carlos Hurtado Miller resigned from his positions as Prime Minister and Minister of the Economy and Finance in the Fujimori cabinet on February 15, 1991. 

He ran for mayor of Lima in 1998, unsuccessfully, and was accused of having received illicit funds from adviser Vladimiro Montesinos for his electoral campaign. After 10 years on the run, in 2011 Hurtado Miller turned himself in, facing accusations of crimes of corruption during the administration of Alberto Fujimori. He wound up under house arrest.

Carlos Meléndez is a political scientist. He lives in Santiago, Chile. This story was produced with our editor, Luis Fernando Vargas, who lives in Costa Rica. 

This episode was edited by Camila Segura and me. Desirée Yépez did the fact-checking. A thousand thanks to Piero Ghezzi for his help verifying the data and concepts in this story. 

The sound design is by Andrés Azpiri and Rémy Lozano, with music by Rémy. 

The rest of the Radio Ambulante team includes Paola Alean, Nicolás Alonso, Lisette Arévalo, Aneris Casassus, Emilia Erbetta, Fernanda Guzmán, Camilo Jiménez Santofimio, Ana Pais, Laura Rojas Aponte, Barbara Sawhill, Elsa Liliana Ulloa, and David Trujillo.

Carolina Guerrero is the CEO.

Radio Ambulante is a podcast by Radio Ambulante Estudios, produced and mixed on the Hindenburg PRO program. 

Radio Ambulante tells the stories of Latin America. I’m Daniel Alarcón. Thanks for listening.




Carlos Meléndez and Luis Fernando Vargas 

Camila Segura and Daniel Alarcón

Desirée Yépez

Andrés Azpiri 

Rémy Lozano

Diana Carmenate


Episode 17